GISPRI Symposium 1997
Globalization in the World and
Asia:
Where Japan Goes?
<Session 2>
The international
symposium on the theme of "Globalization in the World and Asia:
Where Japan Goes?," was held on November 21 of the previous year
at the Keidanren Kaikan Hall, under the auspices of the Global Industrial
and Social Progress Research Institute (GISPRI). This paper reports
on the outcome of the second session of this conference. The second
session was dedicated to the subject: "Globalization, the Era
of Companies Choosing the Countries. Where Japan Goes?" (Mr.
Akira Kojima, Editorial Page Writer, Nihon Keizai Shimbun, acted as
moderator of this session.)
<
Session 2 >
Globalization, the Era of Companies
Choosing the Countries. Where Japan Goes?
Dr. Hiroyuki Itami,
Professor of Management,
Hitotsubashi University
"Asian Networking
of Japanese Firms"
Apparently East Asia
is chosen as the destination of Japanese exports. Most of the 5,700
overseas production subsidiaries of Japanese firms (as of 1994) are
established in Asia. By value, Japanese imports of parts and components
produced in East Asia exceeded the nation's crude oil imports in 1995.
The overseas subsidiaries of Japanese companies are purchasing parts
and components from Japan and enterprises with Japanese capital and,
instead, selling their products to those countries other than Japan.
What this network implies is that Japan has shifted production bases
to East Asia without decreasing its exports and that shift is producing
profits both to Japan and East Asia. The Japanese manufacturing industry
is presenting not what is often called a "hollowing-out" (doughnut)
phenomenon but the expanding "pizza pie" phenomenon. Over
the past ten years, the Japanese manufacturing industry has taken an
action tantamount to what might justifiably be called "expansionism."
This, however, may be beneficial not solely to Japan but to East Asia
as well.
Dr. Takashi Shiraishi,
Professor,
Kyoto University Southeast Asian Center
"Globalization
and Southeast Asian Politics"
It is suggested to
adopt "policing (maintaining social order)." Lying behind
policing are the history and culture of each nation. A way of policing
differs from country to country. Because of a failure to keep up with
changes in the situation, market policing did not work in Thailand.
Japan should aim at a rational and internationally transparent way of
policing and there are many who know it. However, in a society of which
diverse machineries of the state are forming integral parts, as is the
case with Japan, it is rather difficult to solve problems because many
people are dependent on the state.
I would like now to
talk about hegemony (structural supremacy). Over fifty years after the
war, Asia had been placed under the hegemony of the United States. Nowadays
this structure is apparently breaking down. However, Japan has no ability
to bring about a new order. Yet the Japanese manufacturing industry
holds the hegemony in Asia, but it is not the intentional consequence.
In Japan, the consensus of opinion on the future of Japanese society
may lead to something and, hence, a role may be created in forging a
new order in Asia.
Mr. S. L. Wong,
Managing Director
and Professor,
Center of Asian Studies, The University of Hong Kong
"Emerging Economy"
An economic interchange
may not necessarily lead to economic equalization. An economic network
differs from country to country. Japan is characterized by a strong
linage among large corporations; smaller enterprises are placed under
the control of big companies. In South Korea, dominance is held by industrial
conglomerates that have strong connections with the government and are
family-owned. The Chinese economic network consists of what may be called
family-operated smaller business conglomerates. Thus the systems of
these three countries are unlikely to emerge into one. This is because
the economic structure is made up of a social norm and a sense of values.
Regarding the Chinese
economy, the offshore networks of Hong Kong and Taiwan have been formed
and, consequently, investment in China is showing great animation. China's
bureaucratic state-owned enterprises are being mixed with the offshore,
flexible family-operated system. This economic exchange seems to be
effective in relaxing tensions in the Taiwan Straits. There are some
who express concern about the possibility of China, as a great dragon,
presenting an economic threat to neighboring countries in the future.
This view is rather an exaggeration. China is an expanding marketplace,
providing overseas investors with tremendous business opportunities.
The Chinese market is not exclusive. China is not the sole source of
cheap labor.
In Asia, many people
will develop activities beyond the national boundaries in years ahead.
The governments of Asian countries will be urged to do something about
immigrants and citizenship. The government will have an important role
to play when it comes to some aspects of globalization that cannot be
left to the free market and activities of private enterprises. There
will be a growing necessity for cooperation among different Asian countries
and for building networks of non-profit-making organizations, such as
academic circles.
<<
Panel Discussion >>
-Dr. Lee Poh Ping,
Ex-Full Professor
of Faculty of
Economics and Administration, University of Malaysia:
ASEAN's trade with
Japan accounted for 10% of the total in the 1950s but it grew sharply
to 30% in the 1970s. Arguments like "We are exploited by Japan"
increased and anti-Japanese demonstrations took place in Thailand and
Indonesia. Indeed our economic relations were one-sided and unfair.
Later on, however, Japan had made tremendous contributions, such as
through ODA. The result is well-balanced economic relations between
ASEAN and Japan. In course of time ASEAN member nations became accustomed
to Japanese-style trade practices which seemed extraneous to us at the
outset. Instead, attention has come to be directed to non-economic aspects
of Japan. Stated in another way, a view has begun to prevail that we
should pay more attention to the military aspect - that the responsibility
for security should be assumed positively by Japan in Southeast Asia.
There are some who contend that this is only natural considering the
economic power [of Japan]. The Japanese do not express what their ideologies
are. They do not express what view they have of the world. When it comes
to intellectual leadership, Japan has a huge trade deficit with the
rest of the world. Japan does not make a sufficient contribution. Leadership
being exercised by the United States is still power in terms of the
English language, press, media and so on.
Japan did not conceal
embarrassment even at Malaysia's "Look East" policy. Japan
did not take any positive attitude when the other ASEAN nations tried
to follow the model of Japan.
What does Japan want
to do in Southeast Asia? Unless it make that position clear, Japan will
not be able to hold the hegemony in Southeast Asia.
-Mr. Ken Iijima,
Deputy President
and Executive Director,
Sakura Institute of Research:
According to the recent
questionnaire on overseas strategies of Japanese smaller businesses,
they showed no intention of globalization for a number of reasons, such
as business showing an adequate gain at home, a shortage of personnel
working abroad, a rise in domestic nominal wages, and undue competition
on domestic markets. Data from Toyo Keizaisha, however, indicate that
the number of Japanese enterprises doing business abroad exceeded 1,700
in 1996, suggesting that Japanese companies are highly motivated to
expand their business operations into overseas markets, particularly
the Asian market. Although Japanese corporations which take a wait-and-see
attitude may increase in number due, among others, to the monetary crisis,
Asia's potentialities will remain enormous in years ahead.
- Mr. Kojima:
MITI's data show that
the production of the Japanese manufacturing industry in foreign countries
exceeded the exports from Japanese manufacturers in 1995. Asian economies
are already export-centered. I wonder if Japan will be able to become
an absorber. What are the problems facing Asia and Japan?
- Mr. Itami:
A large foreign capital
inflow into Japan is unlikely to occur for ten years to come. Regarding
finished goods, Japan is now a net importer of clothing, for instance.
In the machinery industry sector, competition among Japanese companies
is so intense that foreign corporations are in no position to enter.
Yet another major barrier is the Japanese language.
- Dr. Shiraishi:
Japanese Prime Minister
Hashimoto talked about an expanded exchange between Japan and Southeast
Asia, but he failed to make clear what he had in mind as an aim or objective.
As Dr. Lee noted, Japan does not impose its political vision. On the
contrary, Japan is not trying to bring any vision to light. However,
Prime Minister Hashimoto said Japan would "intend to expand an
exchange based on an enrichment of the past economic relations."
Though it is not explicit, therefore, a vision of Japan within the framework
of Asia may well be put forward.
Japan will be unable
to take the intellectual leadership like the United States does. This
is because the Japanese education is not systematic. Yet Japanese universities
are internationally competitive in terms of compensation, so that some
system should be established to invite scholars from Asia. Japanese
corporations should renovate their personnel administration systems
so as to allow them to recruit people more largely from foreign countries.
- Mr. Wong:
In the context of
globalization, the national boundaries are increasingly blurred so that
transnational networks, EU, NAFTA and ASEAN, are being formed. A failure
to take part in this process means trouble. A language barrier exists
for Japan and China. In this regard, it may not be wise to rely on the
English language alone; an ability to use a local language will be important.
In Hong Kong, education has started to enable people to use three different
languages, including English.
- Mr. Iijima:
Since 1994 over 100
Japanese companies have pulled out of overseas markets. While doing
business abroad, Japan has learned what internationalization is. The
prevailing view is that internationalization takes place abroad. Japan
is backward in internationalization at home accordingly.
A difficulty involved
in doing business abroad is that players should go by foreign competitors'
rule in their field. Foreign investment in Japan is small just because
a setting is not provided to allow foreign corporations to do business
in Japanese markets. Globalization should be pushed ahead in such a
way as to furnish such a setting. Japanese middle and small-market corporations
have an exuberant vitality. Their failures abroad will decrease if Japanese
medium and small enterprises accumulate experience by doing business
with foreign companies operating on Japanese markets.
- Mr. Kojima:
Japanese is very difficult,
to say nothing of English. Mr. Glen S. Fukushima President, American
Chamber of Commerce in Japan, said Japanese regulations involved more
than twenty words for apparently the same notion. Even public officials
cannot understand whey these word really mean: Permission, authorization,
licensing, approval, designation, consent, validation, confirmation,
certification, attestation, inspection, tests, verification, registration,
notification, examination, submission, reporting, etc. This indicates
that the Japanese government offices have a big discretionary authority.
What they are doing is that much cloudy.
What are the conditions
being provided in Japan for the introduction of foreign capital?
- Dr. Shiraishi:
A political intention
as a state is an important consideration.
- Mr. Wong:
Not just the government
is power in the United States. The activities of citizens' organizations
and volunteer groups and their influences on the government are also
important.
- Dr. Lee Poh Ping:
Although China has
actually gained power, the role of Japan is not diminishing for that
reason. China will not be able to beat Japan in capital and product
exporting capability.
- Question 1 asked
on the floor:
I would like to ask
the opinions of panelists from abroad as to not where Japan will go
but what Japan should do.
- Dr. Lee Poh Ping:
Japan should first
think about what it really wants to do and what it should do for the
world. Looking back on the history of the past fifty years, Japan lacked
resolution as to the role of Southeast Asia. So you are unsure of how
much you can rely on Southeast Asia. In the face of the recent monetary
crisis, I wonder if Japan will only follow the United States at its
heels.
In terms of security,
there is an atmosphere being created in Asia for expecting Japan to
play a certain role. Southeast Asian people want to know Japan's definite
policy on security. Japan's diplomatic policy toward Southeast Asia
is unclear.
- Mr. Wong:
Japan has succeeded
in building a powerful economic network, but cultural opening does not
work well. It seems Japan does want to let in not only foreign capital
but foreigners as well. But that is wrong. If the next generation of
Japan aims to move ahead to the next level, economic integration, then
efforts will have to be made to encourage the inflow of foreign workers
and, at the same time, to promote multiple language education - education
in Asian languages, besides English. Through multiple language education
the Japanese people will be able to learn multiple cultures. This will
not weaken their confidence in their own culture. Japan will be urged
to contribute its share to building an NGO-based strategic network in
such areas as environment, education, and national defense. And Japan
should take the leadership in this move.
- Question 2 asked
on the floor:
Due to the evils developed
during the postwar 30-year period of growth, Japan may be forced to
remain in the doldrums from now into the year 2020. Reforms will have
to be made during that period. This is my own view as to "Where
Japan Goes?" Incidentally, no other universities are more warmly
protected than Japanese ones. We don't want such national universities.
- Dr. Shiraishi:
When we think about
how we should build our society, we cannot evade the education issue.
Although we may not need many universities as we have now, it is difficult
to reform these universities within. It is a matter of political intention.
- Mr. Itami:
Japan will enter not
a period of stagnancy but a long period of maturity. A hasty reform
will lead us nowhere. The lack of intellectual leadership is a result
of the absence of Treasury fund investment. The recent reform plans
are nothing more than casual ideas; they lack what you call principles.
They are based simply on a vague optimistic view that Japan may be able
to do well somehow.
- Question 3 asked
on the floor:
What should Japan
do?
- Mr. Itami:
There is one thing
I want to say. I want all the current leaders to yield their positions
to young people. The Japanese soccer team passed the qualifying heats
for the World Cup matches just because a drastic action was taken to
change its manager and players.
- Dr. Shiraishi:
What we need now is
Japan's political intention. This is all we want.
Conclusion
- Mr. Kojima:
"Political intention"
became a common catchphrase. We expect a political will to come up while
the Japanese people commonly have a sense of crisis, based not on a
mere pessimism but on the motive for a reform.
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